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tv   FOX Business After the Bell  FOX Business  January 22, 2013 4:00pm-5:00pm EST

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maker of blackberry. why is it doing so well? >> reporter: there's a couple of things certainly on the docket here, the blackberry maker, talking about the fact that they might be selling off assets or maybe operate a new licensing deal for their system. so that's one of the reasons the ceo talked about that, and that really gave them a boost and pushed them to a new high. lauren: and we've got earnings from google in just a few moments from now. how's the stock looking as we head into the close? >> reporter: it was right around the end change, hovering around 702, but over the 53 weeks it's done well. the question is whether or not the analysts really adjusted their numbers propererly for today's report. -- properly for today's report. david: there's a former marine who started a company called federal express, and he's still running the damn company, i guess its highest of all time was back in 2006, and it's kind of an indication of how the whole transportation index is doing, right? >> reporter: right. and the transportation index has been on fire. it really has hit those
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multiyear highs and bringing those names up along with it. the airlines in particular are the ones. now everyone's looking to the rails lauren: and really quickly, nicole, ibm about the report, how's it looking into the close? >> reporter: pretty much flat, and that's the way it's been. david: well, the bells are ringing, and all indexes are in the green. not spectacularly so, but a solid day for the markets. the dow jones industrial is up almost 58 points, may settle a little higher, in fact, it is settling on the upside as we go into settlement territory these last couple of minutes. s&p futures up by ant the same amount -- about the same amount percentage wise. nasdaq the weakest of all four indexes, although it is in the green. russell 2000 up the greatest amount today. lauren: we also have to talk about the airline stocks certainly flying higher with delta and jetblue leading the charge, hitting a new 52-week high. david: all right.
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let's talk about commodities a little bit. seeing big gains, freeport freeport-mcmoran, reporting higher than expected copper sales. copper, of course, moved higher today, ending at a one week high. lauren: and with the east coast expecting to see coldest weather in two years, natural gas gains are seeing a pop. southwestern energy, chesapeake among the top ten gainers on the s&p 500. david: you know why, it's cheap. we have a string of earnings. we're waiting on google, ibm, amd as well, also texas instruments. plus, one side effect to the health care law could be job losses. coming up, the ceo of the dwyer group runs a franchise of about 1500 small businesses telling us why a lot of those businesses are stopping expansion plans because of obamacare. dinah dwyer here exclusively on fox business. lauren: and td ameritrade
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reporting a drop in profits year-over-year, but client trades are up, averaging 370,000 a day this month, and the stock is rising after beating the street. coming up, the ceo and president, fred tomczyk, tell us us if the retailer investor is coming back and how his company plans to capture their business. david: first, we want to tell you what drove the markets today with today's data download. stocks reversing earlier losses to extend gains for a fourth straight session with all three major indices posting gains, materials and utilities were the top-performing sectors while consumer staples lagged. and precious metals moving higher following the bank of japan's decision to loosen its monetary policy, a little bit anyway. it is adopting a 2% inflation target. gold settling at its highest level since mid december rising $6.20, closing just about $1693 an ounce. and oil getting a boost, hitting
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a four-month high in intraday trading, crude closing up about .7% to settle at $96.68 a barrel. lauren? lauren: let's go to today's action. we've got larry shriver in the pits of the cme and our market panel, mark travels, president of intrepid capital management and charles, ariel focus fund vice chairman. let's -- let's actually go to adam shapiro, we do have earnings from google. adam, what do you have? >> reporter: keep in mind it's hard to figure out whether they're beating street estimates, but earnings coming in $10.65 on revenue of 11.34 billion. so once again, earnings per share of $10.65 and revenue of 11.34 billion. the stock is trading up roughly 3.5% at this point, guys. back to you. david: a miss on the revenue side but a gain on earnings per share, and that perhaps is
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what's leading to this pop. larry, you've been looking at it very care friday at google. of course -- carefully at google. a lot of questions because they sold motorola cable, because motorola mobile isn't really into the mix. a lot of questions about how to figure out these numbers. >> it's very confusing. i think the street was expecting them to beat revenue and not beat on earnings per share, so it's been vice versa right now, but you're right. cpc is something everybody's worried about right now, cost per click. that has gone down given the new use of smartphones and tablet devices, etc. so that's put a negative bent on google. that said, there's been more traffic, so it's a kind of balancing act. nobody knows what to make of it, and that's really the long and short of it. but let's describe some of the headwinds. they've had taxation issues, accounting issues. that's something that's weighing heavily on the stock. but going forward i think people are bullish on google thinking
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that there's going to be a tremendous, exponential rise in the use of tablets, and that's going to be beneficial to google's stock. lauren: larry, one of the things that's popping out, and this is indicative of the transition to mobile that we're seeing, average cost per click for google in the quarter down by 6%. what does that mean to you? >> well, that means what's happened to the stock over the last three or four weeks, i think people were expecting that. maybe that was baked into the stock, and perhaps if you're like me and think it's a good long-term buy, now's the time to start dabbling back into google because i think the market was expecting that. david: you know, there's another figure that they just came out with, paid clicks are actually increased, have increased 24%. maybe that's one reason why the stock is popping as well, 3% after hours. >> yeah, that could very well be. again, baked into the stock, maybe caught people off guard, but that's the good and bad of it. advertising has gone down, but the number of clicks has gone up. perhaps that will balance itself
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out. and beyond all that people are also expecting some game-changing thing from google in the next couple, you know, months to maybe years. david: like what? >> like google glass, google fiber or perhaps something like a self-driving car, getting it beyond the experimental phrase to something that is practical, maybe we could use. just imagine entering the-in con tunnel -- the lincoln tunnel on friday afternoon with a bunch of self-driving cars. [laughter] david: that's a scary concept, larry. >> just getting beyond the experimental phase into something that, hey, maybe this could happen in the next one to two, three years. lauren: larry, last question for you. as we talk about the mobile monetization and advertisers in this space, are google's problems also facebook's problems and linkedin's problems? do they share the same problems? >> you know, when i talk to people that trade this actively, it seems like yes and no. i mean, i think people recognize that google really does have a
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stranglehold on this market, and they're very good at just getting ahead of everybody else. so, yes, perhaps it is a problem for facebook and others, but not a problem for google. i mean, it seems like a long-term good buy right now. david: all right. well, that stock is getting a big pop after hours, about 3-4%. lauren mpt yeah. that was nice. stick with us, we'll see you when the s&p futures close. david: let's bring in mark travis and charles. good to see you both. mark, first to you. let's talk about what happened with google, and the market is trying to figure out whether we are going into a sustained, really bullish market, of course, last year was certainly bullish, a lot more bullish than bearish, or whether or not there's going to be a pullback at some point. you didn't get that impression from what's happened to google after hours, did you, that there'll be any kind of of pullback? >> well, david, i'm convinced they're going to sell the self-guided car to ely musk at tesla, and they're going to merge them. [laughter] all kidding aside, you know, i
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think you've got the feds buying 85 billion a month worth of treasuries suppressing rates. there's a lot of liquidity, you know? as i like to say t-bond market's bound by zero, and people are starting to warm to the equity markets somewhat. but i would hesitate from here to annualize the russell 2000s return year to date which is probably at this point 4 or 5%. so i'd be shocked if we don't get a pullback in here somewhere. my best guess is our friends in washington will give us an opportunity to put money to work at better prices before too long. lauren: hey, charlie, you know, you're bullish, you're bullish on the markets right now. how long can we sustain this momentum? when is the pullback coming? and also your firm 100% in equities right now? >> yeah. nobody can predict when a pullback is going to come, and, in fact, i think it'd be very dangerous to wait or for one. we think that stocks are attractive relative to bonds. nobody has proven that good at
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picking the bottom of a market. so what we think is going to drive things, we're going to have very good housing starts, that's going to help with unemployment. and just like housing brought us down three years ago, we think a better housing market's going to have an underappreciated, positive impact. david: by the way, what we're looking at on the screen, that's ibm. the numbers are out, we're seeing another pop after hours. not as big a pop as with google, but still definitely the plus side. and, mark, charlie, by the way s a very modest guy. he didn't mention that his portfolio is up 6% since the beginning of the year. a lot of cash is coming back into the market. i was talking to charles payne about this earlier in the day, he is seeing all this money from cash, from money market accounts coming back into equities from the retail investor. doesn't that have to have a good, positive momentum going into the year? >> well, i think rising prices attract more buyers, david. and, you know, we've had that. and certainly there's -- david: so you're saying it's just a herd mentality?
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>> well, i mean, i think the fed wants risky assets to appreciate whether that's housing or equity. and it's getting its wish in the short run. lauren: i've got to stop you for a second, adam, please give us ibm's numbers. >> reporter: it's a beat per line, 39, the street was expecting $5.25. here's what's important with revenue coming in at 29.3 billion, the street was expecting 29.09. last quarter revenue fell, and the street was surprised by what had happened, but this time beating the revenue expectation, ibm, 29.3 billion. lauren: if you look at ibm's one-day reaction to earnings, and right now we're having a positive reaction, 75% of the time that predicts how the s&p 500, how the broader stock market does for the five weeks following. that's amazing. we always talk about alcoa being that bellwether, but ibm in many ways is too. charlie, let me bring you in for a second here.
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what's your take on tech, is tech in trouble? >> we like value tech. it's an area people love to hate, names like dell and microsoft and ibm got to very cheap levels. and dell and microsoft in particular at the end of the year, we thought, were extremely cheap. and people always wonder what's the catalyst that's going to turn that around, and we're seeing it with dell. by the way, with ibm although the stock didn't do that well last year, it's been a great run for the last four or fife years. iibm was written off for did at the beginning of the decade, and it's had a very, very nice corporate turn around. david: mark, i'm suspecting that because you think those guys inside the beltway are going to mess things up again and there will be a buying opportunity, that you're big in cash right now. about what percentage of your portfolio's in cash, and where else is it? >> well, david, i run what i will call a balanced fund of small to mid cap equity, value sensitive and short duration high-yield debt. you know, high-yield debt's now
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trading with a less than 6% handle, so that's not cheap. i tend to agree with charlie. we happen to be involved with dell. it'll be interesting to see if they can take it private at the price talk they're talking of $14 or $15. i, frankly, think that's too cheap. we valued it in the high teens, and i think other people get to a higher number yet. it'll be interesting to see if michael dell with his 15% and mason hawkins at southern asset with his 7 vote to approve at this low a price. i certainly hope not. but, you know, i think the people need to remember that prices can go up and down, and we try to look for asymmetrical opportunities where we can't lose any money from here. i think dell, frankly, is an arbitrage of that kind of opportunity. i don't think there's much price can decline from this point, and i think there are others like that. american greetings' another one we've been involved in where management through the a different --
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[inaudible] we think they may need some extra equity to get the deal done at 17.50. but if you look at those shares today, if you can collect the dividend between now and the end of march, you get a decent return just in the next two or three months. again, that's not how we generally look at it. we're trying to find a discount to private market value and trying to, you know, hold on until we get to that valuation. david: well, american greetings is down 2% today, by the way. might not be a bad dip to get in on if you believe in it. guys, thank you very much. mark travis -- >> you're welcome. david: appreciate it. >> thank you, lauren. lauren: td ameritrade saw a nice pop today after beating expectations in the most recent quarter. up next, we'll talk to the ceo about how he's attracting a record amount of new investor money, something he calls a major achievement. how he plans to continue that growth. david: also, the health care law could be unhealthy for job creation.
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coming up, this is exclusive, the ceo of the dwyer group -- does everything from glass repairs to plumbing -- it has 1500 small businesses around the world, telling us why some companies are looking to keep the head count under 50. lauren: plus, the bank of japan spiking to buy government bonds. what this could mean for your fixed income investing and where to turn for profits. ♪ at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it?
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>> reporter: and we've got amd numbers to report for you. it looks as if it's a beat, reporting a loss of 14 cents per share as opposed to the street was expecting 20 cents a share on revenue of 1.16 billion, the street was expecting revenue of 1.15 billion. their quarterly gross margin is now 16%, and, of course, they have been struggling with the slowdown in pc sales worldwide. back to you guys. david: meanwhile, ibm and google reporting earnings earlier this hour. let's head back to nicole on the floor of the new york stock exchange. big news on what's happened to google after hours. >> reporter: this is some exciting stuff coming out after the bell.
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let's start off with google, the stock is up about 4.5%. we got in their numbers, earnings per share when you look at the earnings per share, 10.65 versus 10.42, 11.34 billion versus 12, that was, that looked like a miss there, but we're watching google, the aggregate paid clicks, that's key. increased approximately 24% over the fourth quarter in 2011. so, but for the average cost per click for the quarter, it was down about 6%, so we are watching that. the revenue, though, did miss the analysts' estimates, but the stock is higher. ibm, that is looking higher so far, up over 3% right now. we are getting their numbers in. the global financing segment revenues, those were down. however, when we talk about ibm, it certainly is one that we'll be watching tomorrow and on the move, but there are earnings per share as we look at ibm, they're in earnings per share came in at 5.39, that was of a beat there. and then we talk about the
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revenue for the quarter, 29.3 billion, that exceeds analysts' estimates. so keep an eye on it tomorrow. back to you. david: good news for ibm and spectacular news for google. thanks, nicole. lauren: all right, let's face it, trading volumes are sluggish, but td ameritrade citing record new client assets. but the company's profits were on the decline this quarter. david: so how much of a concern is this, and what are the expectations going forward in 2013? fred tomczyk is td ameritrade's ceo and president, he joins us from the floor of the new york stock exchange. good to see you, fred. i don't want to bury the great news, because i think that's the news. you guys have had this steady increase of about 20% since november, and that does coincide with this sort of turn around with the retail investor. all those people who were spooked by what happened in 2007, '8 and '9, it looks like they're finally shaking off their fear and getting back into the market. that's got to be the reason you're succeeding now, right? >> well, our trading level is
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still pretty soft, so they're coming back, but they're coming back slow. but the real reason we're doing so well is because we actually have solid asset gathering, we had very good market fee-based revenue growth, and our expenses is that we beat consensus. trade anything january is picking up, but it's picking up slowly, and we'd still like it to be higher. lauren: where are you going revenue, where's the money coming from and going into? >> the money's going into the -- some of it's going into the market, could be bond funds. of our market fee-based balances are up about 32% year-over-year, and the revenue has grown about 28% year-over-year. and that's helped to offset the impact of the low interest rates. lauren: just looking at your active investor, how are those accounts doing? >> well, the active investor is continuing to be active, but long-term investors are slowly coming back. we saw that in our investor movement index in december where investors were generally getting
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more bullish, increasingly bullish. so far in january just about every trading day has been a net buy by our climates, so they're slowly coming back into the market. and the s&p 500 was up 14% -- 13, 14% last year, 4% so far in the year, so they're slowly coming back. david: fred, what are you looking for for that continued success that you've had since november? are you looking to the ped? are you looking to the folks inside washington, just a better growth for the general economy or what? >> i think mainly it's the growth in the economy. and, you know, just getting those positive indicators going. it does feel like the economy's got it footing. as long as washington doesn't derail it here, i think we'll have a decent year. david: why do you think the economy isn't growing better or? how much should it be growing right now as opposed to 2%? >> i think it'd be nice to see it up at 3, 4%. but i think realistically 3% would be nice. i think it's all to do with uncertainty coming out of washington.
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the reality is if we could just get that -- corporations have so much money on their balance sheets, retail investors are in such risk-free assets, just give us some -- let this get a little momentum, and i think the market will look after itself. lauren: fred, you've been ceo since october of 2008. you saw the crisis, you saw the recovery. are we in the new normal? is that a word that we should just accept and things are different now, we're going to have this slow growth? >> i think that depends on your time horizon. i do think you're going to see slow growth relative to what we've historically been used to here for the next, you know, three if not five years. i think it's going to be a long, slow recovery. david: great to see you, fred. congrats on the numbers. appreciate you coming in. >> thank you. david: well, the man who brought in a record number of enforcement actions as the top cop at the sec is ending his time there this week. our own peter barnes spoke with him about what's being done to continue all that aggressive enforcement of insider trading cases that we report on. he joins us right after the
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break. lauren: plus, the ceo of the dwyer group joining us exclusively to tell us why the health care law is hurting jobs in the service industry, after this. ♪ copd makes it hard to breathe,
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david: the sec top cop robert khuzami is getting ready to step down as the sec epforcement director, not too soon for a lot of people on wall street. he is leaving after four years with a record that includes charges against more than 65 ceos during his tenure. lauren: peter barnes spoke exclusively with the outgrowing director this afternoon.
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here he is from the sec headquarters. >> that's right. critics of khuzami say he was not tough enough on wall street that. he brought more nondisclosure cases than fraud cases. that he went more affirms rather than individuals. and when he did go after individual, he went after the small fries. he did not prosecute enough cases coming out the financial crisis. khuzami told me today he feels his legacy is stronger than that. take a listen. >> i think the number of folks who support our efforts and recognize what we've accomplished significantly outnumber the critics. but speaking to the critics, look, we have charged over 150 individuals and entities in fins al crisis cases. nearly 70 cfos, ceos and other high-ranking corporate officers. we bar ad large number of individuals. so the financial crisis cases we've been the most vigorous enforcement authority out there and it's a very real record of
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accomplishment. >> now, as you may recall khuzami came in after the sec missed the biggest ponzi scheme of all time with bernie madoff. i asked him if all the improvements and changes that he has made here at the enforcement division will stop the next madoff? he said the answer is quote, a resounding yes. david and lauren. david: all right. although one get the sense we will see another madoff somewhere along the line. peter, thank you very much. great interview. appreciate it. >> thank you. lauren: the parent company for 1500 franchises already feeling the pain of the health care law. up next the ceo of the dwyer group tells us why the law is killing jobs in a fox business exclusive. ♪ . [ engine revving ]
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♪ to help you not just to stay alive... but feel alive. the new c class is no exception. it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. lauren: welcome back. time for a look at today's market drivers. stocks reversed course midday trading with all three major averages ending the session in the green. the dow ending at another five-year high. materials and utilities outperformed while tech and consumer staples lagged. s&p 500 posting its longest winning streak in nearly six weeks. according to the national association of realtors sales of previously owned homes fell 1% in december but don't fret. for all of last year sales
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hit 4.65 million and that was the highest level in five years. and the richmond fed's index of manufacturing activity contracting in january, coming in at negative 12, down significantly from december's positive reading. within the numbers, the new orders index took the biggest hit sinking 27 points. of course readings below zero indicate contraction. dave? david: we have one more earnings report before the earnings are out today. texas instruments just reporting right now. go ahead, adam, what are the numbers? >> david, it is a beat on both lines. 36 cents% share. the street was expecting 34 cents on revenue of 2.9 billion. listen to what their ceo is saying. this is from rich templeton. he said, quote, our visibility into future demand remains limited as our lead times are short and our customers are reluctant to commit to extended backlog. so this is, they're beating on the lines but not looking as if things will be so great going forward. david: beating on the lines
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but the news is between the lines. thank you very much, adam. appreciate it. >> new health care law requires many small businesses provide health care for employees or they face a fine and a lot of businesses say this requirement is forcing them to hold off on any new hiring. joining us now in a fox business exclusive is dina diewer, owner the dwyer group. thanks for coming in, appreciate it. you may recognize this woman. she was one of the stars of under cover bosses, if you remember that reality series which i liked a lot. how is the health care law affecting your business? >> david, unfortunately it is going to hurt our larger franchises that serve the major markets. so, business already is complex enough. this is just another layer of complexity that is being added. and the interesting thing about franchising is, we have folks coming to us day in, day out because business is already tough enough. yesterday we kicked off our first day of basic training
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of the new year. we have 50 folks in waco, texas, had been in business 15, 20, 0 years. they are looking for ways to make it easier but unfortunately the government is making it harder. david: there are 1500 franchises you're in control of. they do home care stuff for, whatever it is, air-conditioning, that sort of stuff. and a lot of them employ less than 50 employees. what you're telling me a lot of new franchises are people who had the small businesses but had to close up shop and coming to a franchiser because they can't make it on their own? >> yeah. they're not closing their shops. they're actually converting their shops to become a franchisee of one of our brands. mr. rooter, mr. electric. difficult doing business. think about it. keeping up with social media today, david is a lot. what is ppc? these guys are plumbers and electricians and they're doing work important to all of us to make our homes comfortable but life is complicated. david: let's go back
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specifically to the health care law because it is supposed to only affect company that more than 50 employees. a lot of your franchises have less than 50 employees. does it still affect them? >> the good news, is, that the majority of our franchiseses because we're in the service sector don't require 50 employees to take care of their customers in the average marketplace that. is the good news for the dwyer group. that is not good news for most of my friends in franchising. but they aspire to become larger franchises. they want to serve a larger marketplace. unfortunately this new health care law will make that challenging. david: are there franchises that perhaps would like to expand to over 50 employees but don't do so because they're afraid of obamacare. >> i would say yes. we have a lot of franchisees are on the line that are the larger ones, do i take an additional territory? in our businesses we have seven brands. so they could own a mr. rooter franchise and buy rainbow international restoration franchise but
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should they do that right now if it takes them past the 50 mark? david: what about other regulations? it is not just regulations of the new health care law a lot of other regulations come in, enforcing much harder than they used to some of the regulations they have. how is that of a affecting business? >> any regulation, typically is challenging for our businesses. we have again enough complexity in just running businesses that we run. and we love helping people have a better quality of life. that is the business that we're in. we happen to use franchising to do it. you keep layering on these additional regulations. it makes it tougher to do business. what i find our franchises are resilient. we're in the business of looking for ways to work through it and control what we can control. david: when you're talking about complexity, in my mind the first thing that comes to mind when i think of the government are taxes. we have a tax code now that is so much more complex. we heard all this talk about simplification last year. we've gone in exactly the opposite direction, putting in all of these deals for special interests and now you're not even sure whether,
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what your exact rate is depending when you book business. how are you sorting all that out? >> well, it's a challenge. i think about our franchises. most of them are sole proprietors. so their taxes are being passed through the entity that they own. for every dollar that they're paying in additional tax, that is one less dollar they can put back into growing their businesses and creating jobs. we're kind of starving the goose that feeds the golden egg of producing more jobs. david: well, at least you are growing partly as a result of all the complication. people want to go into a franchise. dina owens, from the dwyer group. >> thanks, david. david: appreciate it. lauren: the bank of japan taking a page out of our playbook and announcing it will buy government bonds. up next find out why this could be a good thing and where you can find opportunity in fixed income from someone with over 30 years of experience in the industry. you can not afford to miss
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this one. we'll be back. ♪ [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission?
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♪ whatever your business challenge, dell has the technology and services to help you solve it.
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>> i'm adam shapiro with your fox business brief. with earnings season in full swing many companies reporting after the closing bell. csx higher in after-hours trading following its fourth quarter results. earnings per share for the railroad company beat estimates four cents, coming in 43 cents a share. revenue came in above forecast at $2.9 billion. norfolk southern out with its fourth quarter earnings. earnings topping expectations by 11 cents. revenue also topped estimates at $2.7 billion. loews is boosting its workforce ahead the brink season the busiest time of year for the home improvement industry. they plan to hire roughly 45,000 seasonal employees and add 9,000 permanent
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i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. lauren: the bank of japan following the federal reserve and the european central bank's lead today pledging to buy an unlimited amount of government bonds to fight off deflation. david: the question we want to know will japan's central bank's move help spur global economic growth? joining us, john donaldson, haverford vice president of fixed income. john, first on this move by what japan did, essentially the market was not too pleased. they didn't think japan went far enough in terms of its easing, in terms of what the fed is doing and, what europe is doing. what do you think move in general? >> i don't know about far snuff enough. thank you very much about having me on. i don't know far enough is
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primary concern as opposed to fast enough. they're talking about doing something out later this year, early next year, is in pretty sharp contrast to our fed where if they're buying securities, it is starting tomorrow, and when they talk about two years from now, they're talking about when they're easing might possibly end. so i think it is that not fast enough that is the market's concern today. lauren: right. moving a little bit closer to home, john, when the fed perhaps, maybe this year, ends our bond buying, our qe, what happens then to the bond market? >> it may be not as much of a shock but clearly with bonds priced where they are in treasurys and agencies in particular, these low yields, it is still hard to justify their return levels on bonds. you know when the intermediate index for bond yields was slightly above 1%, that is in pretty sharp contrast to all the positive earnings that you've dealt with in the last 40 minutes on the show where you have talked about stock pops of
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three, 4%. again where bond market yield is one to barely 2% for a broad index. that is a pretty big difference in valuation of the asset classes. david: the fed must be squeezing out other bond buyers, right? they're going in such a big way. aren't they doing that, squeezing out the other buyers in the market? >> they're not as much as you would think. because they're just soaking up some of the already large governmental supply. so they're not really squeezing anybody out of any other markets. david: in other words, as long as politicians are willing to, to endure and incur more debt then there will be plenty of bond to sell? >> yeah. i think what they're doing is keeping there from being a market penalty for bad decisions. if interest costs go up, you know, that could be a pretty good shock to the budget. lauren: john, i want to get in your head a little bit now. you do see opportunity in
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fixed income. so where exactly, how are you playing this field? >> a couple of things we would look at. one, we would look at owning financial bonds in shorter maturities, ending a little bit longer. we want nonfinanceal bonds. that is a reflection how far financial bond spreads have run and how much they have contracted to other bonds. david: yeah, i'm looking at corporate bonds and the munies. among those, i imagine you have a mix but which one do you prefer? >> we mike munies and taxable munies based upon pricing and valuation. we like the fact that the munies will be less correlated to our equity portfolios while corporate bonds are better value than governments, they will have a higher correlation to the equity markets. if you will tell people to underweight bonds as an asset class and perhaps overweight stocks you don't necessarily want to then double up the overweight in
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bond bond sectors highly correlated to the bond market. david: delaware high muni bond is one you particularly like, right? >> in that sector, it is okay, yes. lauren: people like munies because they're looking for tax-free income, right? john donaldson, haverford vice president and director of fixed income. thank you very much. appreciate your perspective tonight. >> thanks a lot. david: let the fighting resume. today it is back to work for congress. battle lines continue to be drawn between those who want big government and those who want big government budget cuts. we'll take you to the front line. that is the capitol. we have the latest as the house prepares for a vote on the debt ceiling. ♪
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david: congress heading back to work today following the president's inauguration speech yesterday which a lot of the members of the republican party saw as a poke in the eye to them. >> the first order of
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business for congress, the looming debt ceiling. rich edson live on capitol hill. hi, rich. >> hey, lauren, we'll get that vote tomorrow in the house to extend the debt ceiling to the middle of may. when it comes to a longer term debt solution, longer-term debt ceiling solution and when it comes to taxes and spending the parties are far apart as they always been a day of a the president's inauguration and one which both parties have a very different take on the president's address. >> people can criticize president obama about a lot of things but not his ability to communicate and i think he communicated to the american people a message of hope, a message of action, and i liked it very much. i, we should move past the name-calling phase. >> one thing was pretty clear from the president's speech yesterday. the era of liberal system back and unabashedly far left of center inauguration
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speech. certainly brings back memories of the democratic party of ages past. if the president pursues that kind of agenda, obviously it is not designed to bring us together. >> house speaker john boehner is meeting with the house republican conference right now. according to a source in the room boehner is calling for the republican party to present a budget that balances the federal budget in 10 years. given where democrats and republicans have been on that issue, republicans against any type of increases in taxes you can imagine all that would come through spending cuts and not be all that acceptable to democrats on capitol hill. so recall tore there will be a vote in the house to extend the debt ceiling until may 19th. that is contingent both houses of congress passing a budget. something that senate majority leader harry reid said is a big step forward for republicans. they're not calling for any spending decreases in this debt ceiling increase. the white house put out a statement said it would not
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oppose a short-term debt deal though neither getting real specific whether or not they would actually agree to what the house is hoping to pass tomorrow. back to you. david: rich, reading through that, frankly didn't take too long to read through the president's speech because it was so short, there was no indication, i saw no incation, one reference to the deficit, a throwaway line said we have a big deficit. we have to do something bit, with you we still have to continue with all the spending. i didn't see anything about cutting back on spending. did you? >> no, david. in fact that was more a defense of government in the president's speech, overarching theme of his governing philosophy and one has not been about cutting any type of enlightment spending when it comes to medicare, medicaid and social security and cutting benefits those receive. lauren: i am president, hear me roar. rich edson, working in washington, d.c. you have to invest in tylenol right? an advil. you're coughing this stuff every day. david: no, these guys love it. you don't understand these
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guys are nerds. they watch this stuff. they open a beer and sit in front of the tv and love this stuff like it was a football game, right, rich? >> yeah. it is a city. there is something wrong with all of us here. david: i still love washington. we love you. thank you, rich. >> thanks, guys. lauren: if you ever sent out a beat you're about to become a part of american history. more details after the break when we go "off the desk.". ♪
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call the number on your screen or go to to try lifelock protection risk free for a full 60 days. use promo code: gethelp. plus get this document shredder free-- but only if you act right now. call the number on your screen now! lauren: it is time to go "off the desk" and over to the library of congress where if you ever sent a tweet, your words are being arc curved. that is right. all 400 million tweets sent out each day by americans are being saved. the library of congress --. david: what a waste of time, space and money. lauren: they help tell the story of america and research value. david: what i had for lunch yesterday. lauren: i tweet smart things. >> the number two thing to watch tomorrow, will be netflix earnings after the bell. analysts expect the company's losses to continue due to high content costs but they do anticipate er


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